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Employment Law Newsletter – December 2021
Cases:
- COVID-19: SEISS was indirectly discriminatory against new mothers but was justified
- Equal Pay: Morrisons’ retail workers employed on common terms with distribution centre workers
- Disability Discrimination: Tribunal erred in focusing on adverse effects of claimant’s avoidance behaviours rather than impairments
- Disability Discrimination: Tribunal reasoning in disability case did not show critical evaluation of justification issue
- Wrongful Dismissal: Tribunal should have weighed claimant’s oral testimony against opposing hearsay evidence
- Flexible Working: Agreeing to appeal hearing outside the three month decision period does not mean the decision period is extended
Other news:
- Equal Pay: Fawcett Society urges employers to stop asking about previous salary to reduce pay inequality
- Guidance: CIPD publishes new Effective Hybrid Working guidance
- Flexible Working: Study shows refusing to accommodate flexible working requests costs UK businesses almost £2 billion a year
- Workers: Government call for evidence on umbrella company market
- Support for Women: Employment Minister calls on employers to provide stronger career support to stop menopause affecting careers
- Parental Leave: Survey reveals prospect of better parental leave policies would lead six in ten employees to switch jobs
- Statutory Pay Rates: April 2022 proposed increases to statutory maternity, paternity, adoption and sick pay announced
Cases:
COVID-19: SEISS was indirectly discriminatory against new mothers but was justified
Under the SEISS (Self-Employment Income Support Scheme), grants were awarded to self-employed individuals based on average trading profits (ATP) in the three full tax years preceding 2019/20. The scheme was amended in July 2020 to include those who had not qualified because of the effect of childcare, pregnancy or maternity on their trading profits or total income for the tax year 2018-2019.
In R (on the application of Motherhood Plan) v HM Treasury [2021] EWCA Civ 1703 an application for judicial review of the scheme was brought by a self-employed mother and a maternity rights charity. They argued that, contrary to the ECHR, it was indirectly discriminatory to calculate grants based on ATP in previous tax years, since women on maternity leave during those years received smaller payments than they would otherwise have been entitled to. Alternatively, applying Thlimmenos v Greece [2000] ECHR 162, grants for women on maternity leave in the calculation period should have been calculated differently to remove the disadvantage they suffered if treated the same as everyone else.
The Court of Appeal held that the High Court had been wrong to find that the use of ATP did not constitute prima facie indirect discrimination. The judge had found that the disadvantage to new mothers was not “caused by the scheme itself” but by their reduced earnings while on maternity leave. However, that mis-identified the alleged disadvantage, which was that recent mothers’ earnings in the measured period would be disproportionately unrepresentative of their hypothetical earnings had there been no pandemic, resulting in lower payments under the scheme for recent mothers as a group. That disadvantage was caused by the use of ATP as the relevant measure.
However, the High Court had reached the correct conclusion on justification. The indirect discrimination was justified because the SEISS was devised in the extreme and unique circumstances of the pandemic, where time was of the essence. Obtaining additional information from recent mothers would have significantly delayed the implementation of the scheme and the information would have been difficult to verify. In addition, the choice of ATP to assess profits had legitimate aims, namely: effectiveness; speed of delivery; ease of verification to reduce the risk of fraud; and the need to avoid perverse effects and costs. The requirements of speed and simplicity meant that the government was justified in introducing the scheme in a form which did not contain special provision for new mothers.
Equal Pay: Morrisons’ retail workers employed on common terms with distribution centre workers
In Abdar and others v Wm Morrison Supermarkets plc and another (2021) ET/1811283/18 an employment tribunal has held that retail workers in Morrisons and Safeway supermarkets could compare themselves for equal pay purposes with logistics workers in their employer’s regional distribution centres. At a preliminary hearing, the tribunal held that the majority of the claimants were employed on common terms with the logistics workers for the purposes of section 79(4) of the Equality Act 2010 (EqA 2010). Further, the terms on which they were employed had a single source for the purposes of their directly effective rights under Article 157 of the Treaty on the Functioning of the European Union (TFEU).
Subject to any appeal, the next stage will be for the tribunal to determine whether the retail workers’ roles are of equal value to those of the logistics workers. The tribunal noted that there is a dispute between the parties as to whether the ECJ’s decision in K and others v Tesco Stores Ltd [2021] IRLR 699 is binding in this case, by virtue of Articles 86 and 89 of the Withdrawal Agreement and sections 6, 7A and 7C of the European Union (Withdrawal) Act 2018 (Withdrawal Act). In Tesco, the ECJ held that Article 157 of the TFEU extends to equal value claims. However, although the referral was made pre-Brexit, the decision was handed down after the UK left the EU. It is not disputed that if Tesco is not binding, the tribunal may have regard to it to the extent that it considers it relevant. It was accepted that the tribunal was bound by section 6 of the Withdrawal Act and the EAT’s judgment in Asda Stores Ltd v Brierley and others [2018] ICR 384 that Article 157 of the TFEU has direct effect in equal value cases. The supermarkets did not therefore advance any arguments as to the binding effect of Tesco in the tribunal proceedings, but may do so on any appeal.
Disability Discrimination: Tribunal erred in focusing on adverse effects of claimant’s avoidance behaviours rather than impairments
In Primaz v Carl Room Restaurants Ltd t/a McDonald’s Restaurants Ltd and others [2021] UKEAT 2020-000110, the EAT has held that a tribunal erred in focusing on the behaviour adopted by a claimant in an attempt to manage her conditions when considering whether those conditions had an adverse effect on her day-to-day activities. The claimant suffered from epilepsy and vitiligo and avoided coffee, alcohol, cosmetics, cleaning products, sunlight and all medications (including those prescribed by her physicians to manage her conditions), believing that they would adversely trigger her conditions. However, there was no medical evidence to support the claimant’s beliefs, and she was acting contrary to medical advice in refusing to take medication.
The EAT held that the question of whether a claimant’s impairments had an adverse effect on their ability to carry out normal day-to-day activities was an objective one and could not be determined by a claimant’s subjective beliefs about how to manage their conditions. In this case, the claimant only relied on physical, not mental, impairments. The tribunal had to disregard the claimant’s coping mechanisms, even though her belief that they were necessary was strongly held. It should have considered the impact the actual conditions had on the claimant’s day-to-day activities, leaving aside the impact of her avoidance behaviours. The EAT remitted the question of disability to a fresh tribunal, noting that this was a novel point of law on which it believed there was no previous case law.
Disability Discrimination: Tribunal reasoning in disability case did not show critical evaluation of justification issue
In Gray v University of Portsmouth [2021] UKEAT 2019-000891, the EAT has allowed an appeal where a tribunal failed to provide sufficient reasoning in its judgment to demonstrate that it caried out a critical ev aluation on the question of objective justification in respect of a claim for discrimination arising from disability under section 15 of the Equality Act 2010.
Mr Gray was employed by a University in its Information Service department from 2009. He was dismissed in 2017 following a two-year sickness absence related to his disability. He complained to an employment tribunal that he had suffered discrimination arising from his disability, alleging that the University had treated him unfavourably by initiating a formal meeting under their absence process, stopping his sick pay, dismissing him and rejecting his appeal against dismissal.
The tribunal rejected the claim. It determined that the University had a legitimate aim in ensuring the efficient running of the Information Service department as part of its provision to students. The Tribunal considered each of Mr Gray’s complaints and held that the actions taken were a proportionate means of achieving the legitimate aim.
Mr Gray appealed to the EAT, arguing that the tribunal had erred in its approach to objective justification under section 15 and had not adequately explained its conclusions. The EAT noted that the critical evaluation required for the purpose of section 15 means the tribunal must carry out its own assessment of objective justification. Further, the tribunal is required to make clear how it had undertaken its assessment by demonstrating that critical evaluation in its reasoning.
The EAT took issue with the tribunal’s findings on Mr Gray’s dismissal and the decision to uphold that dismissal on appeal. In its judgment, the tribunal had stated that it was “obvious” that continuing to hold Mr Gray’s job open was significantly disruptive for the University but, critically, failed to explain why it reached that finding. The judgment had not included findings about how Mr Gray’s job was being covered, whether his absence was actually causing any disruption or whether the University incurred additional cost. The EAT allowed the appeal and remitted the matter to the original tribunal.
Wrongful Dismissal: Tribunal should have weighed claimant’s oral testimony against opposing hearsay evidence
In Hovis Ltd v Louton [2021] UKEAT 2020-000973, the claimant, a lorry driver for Hovis, was summarily dismissed for smoking while driving his company vehicle, which was a serious breach of the company’s smoking policy and a criminal offence. He denied smoking, and the investigator found no physical evidence of smoking in the vehicle. However, the evidence at his disciplinary hearing, which was accepted by the employer, included written statements by two eyewitnesses (a Hovis manager and his wife, who alleged that they saw the claimant smoking when they overtook him on the motorway). It also included dashcam footage confirming that it was indeed his vehicle.
A tribunal found the dismissal fair but wrongful. On the wrongful dismissal point, the tribunal noted that it had to undertake its own assessment of whether the claimant had been smoking. Neither of the eyewitnesses gave oral testimony, although their written statements from the internal investigation were put in evidence. The tribunal held that, without being able to assess their testimony, it could not conclude that the claimant was guilty on the balance of probabilities.
The EAT rejected Hovis’s first ground of appeal, that the tribunal had impermissibly fallen back on the burden of proof rather than making a positive finding. This was not a case where the evidence both ways had been equally compelling, leaving the tribunal unable to make a decision. Rather, the tribunal had held that there was insufficient evidence to support a finding that the claimant had been smoking.
However, the EAT upheld the second ground of appeal, namely, that the tribunal had wrongly attached no weight to the hearsay and documentary evidence. The employment judge had said that, without the eyewitnesses in attendance, she was “unable” to evaluate their credibility against that of the claimant, and therefore “cannot find” that the claimant had been smoking. In the EAT’s view the judge was wrong to say that she was “unable” to assess the credibility of the statements or that it was not open to her to find against the claimant. The statements were admissible as hearsay, and there was no rule that oral testimony must necessarily trump opposing hearsay or documentary evidence if the judge finds it more reliable or compelling.
For those reasons the EAT overturned the finding of wrongful dismissal and remitted it to a fresh tribunal.
Flexible Working: Agreeing to appeal hearing outside the three month decision period does not mean the decision period is extended
In Walsh v Network Rail Infrastructure Limited [2021] UKEAT 2020-000724, the claimant submitted a flexible working request in February 2019, which the employer rejected in March and the claimant appealed. Following much correspondence causing a delay in arranging the date of the appeal hearing, it was eventually agreed between the parties in late June 2019 to hold the hearing on 1 July. However, this meant the appeal hearing was outside the three-month ‘decision period’ for resolving the request.
Before the appeal hearing, on 25 June, the claimant submitted a tribunal claim alleging breaches of the flexible working legislation, including that the process had not been concluded within the decision period. The tribunal held that by agreeing to attend the appeal hearing he had, by implication, agreed to extend the decision period itself meaning his claim was made prematurely and therefore the tribunal did not (yet) have jurisdiction to hear the claim.
The EAT disagreed, holding that in order to extend the decision period it must be clear that there is an agreement to extend the decision period. Agreeing to attend an appeal hearing does not necessarily mean that the employee also agrees to extend the decision period.
Other News:
Equal Pay: Fawcett Society urges employers to stop asking about previous salary to reduce pay inequality
The BBC reported on 18 November 2021 that The Fawcett Society is urging employers to stop asking jobseekers about their previous salaries. The Fawcett Society is the UK’s leading membership charity campaigning for gender equality and women’s rights at work, at home and in public life and this is part of their “Equal Pay Day 2021 Briefing” campaign.
The question about past salaries is faced by almost half of working adults (47%) and affects 61% of women’s confidence to negotiate better pay. The Fawcett Society is calling on employers to stop this practice which contributes to pay inequality by replicating gaps from other organisations. Only a quarter of people surveyed believe their salary should be based on their previous rate of pay, but more than half (58% of women and 54% of men) think they have been offered a reduced salary because of this question.
Guidance: CIPD publishes new Effective Hybrid Working guidance
The CIPD (Chartered Institute of Personnel and Development) has published new guidance on 3 December 2021 around Effective Hybrid Working. The guidance was produced in partnership with the government’s Flexible Working Taskforce. The guidance focuses on the key areas of:
- People management
- Recruitment and induction
- Inclusion and fairness
- Health, safety and wellbeing.
They explain that hybrid working is a form of flexible working where workers spend some of their time working remotely (usually, but not necessarily, at home) and some of their time at their employer’s workplace. The Taskforce, which was relaunched earlier this year, is a partnership across unions, businesses, and government departments, and aims to improve public policy around flexible working. Members include the CBI, the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and Working Families.
The guidance was published on International Day of Persons with Disabilities, and is intended to encourage employers to train managers on how to ensure best practice in hybrid working. Inclusivity in the key to making hybrid working effective, allowing all employees access to flexible arrangements who are then treated equally regardless of how they work. It is also important to take into account people’s individual working preferences and personal circumstances. There could be unintended consequences for non-office based employees as they may miss out on things which happen in the office (such as training or learning opportunities), likewise promotions or other business opportunities may not be so obvious for those who choose to work from home more, leading to inequality. As such, hybrid working policies should be kept under regular review, with input from employees being key to maintaining working relationships.
The guidance also covers performance management, remote communication and effective collaboration, as well as ways to improve recruitment processes in order to accommodate flexible working practices.
Flexible Working: Study shows refusing to accommodate flexible working requests costs UK businesses almost £2 billion a year
Personnel Today reports that, according to a study conducted by Flexonomics, refusing to accommodate flexible working requests is costing UK businesses £2 billion a year. The cost is attributed to the link between flexible working and employee morale, boosted productivity and lower employee absence. The study found that flexible working is currently contributing £37 billion to the UK economy and a 50% increase in flexible working could result in a net contribution of £55 billion to the UK economy and create 51,200 new jobs.
The report also looks at removing the myths around flexible working only being suitable for a few sectors and highlights how the construction and other “hard-to-flex” sectors could embrace flexibility through methods such as self-rostering.
Ahead of the government’s response to the consultation into flexible working, the report calls for more to be done to ensure businesses are being clear about flexible working opportunities in its job adverts and to be more proactive about communicating the benefits of flexible working to businesses.
Workers: Government call for evidence on umbrella company market
On 30 November 2021, HM Treasury, HMRC and BEIS published a call for evidence on the umbrella company market. It follows concerns about the tax and employment rights risks posed by umbrella companies. An umbrella company is a company that employs a temporary worker (an agency worker or contractor) on behalf of an employment agency. The agency will then provide the services of the worker to their clients.
Umbrella companies currently fall outside the regulation of the recruitment sector (Employment Agencies Act 1973, Conduct of Employment Agencies and Employment Businesses Regulations 2003 (SI 2003/3319) and Agency Workers Regulations 2010 (SI 2010/93)). In April 2020, the government sought to address transparency on employer identity and pay for assignments of agency workers supplied through umbrella companies by introducing the Key Information Document (KID). The government proposes a multi-stage process of further action. Primary legislation will bring umbrella companies into the regulatory framework. Regulations will then set out minimum requirements and address common issues, including:
- Non-payment of wages and payroll skimming (where umbrella companies “skim” money from payslips or inflate deductions to retain money that should be received by a worker).
- Non-payment of holiday pay (by failing to inform workers of their entitlement or failing to pay the correct amount).
The Employment Agency Standards Inspectorate will continue to ensure compliance with the KID and enforce the regulations. Workers are invited to share their experiences of working through umbrella companies and the KID, to identify means of better protecting workers based on the most up-to-date market practices. Specifically, views are invited on the reasons for the increased use of “joint-employment” contracts in which an umbrella company and employment business both employ the worker (making it more difficult for workers to understand the nature of their relationship with either entity).
HMRC gives examples of tax (direct and indirect) non-compliance and evasion by umbrella companies and the steps that it has taken to combat such activities. However, HMRC seeks more evidence about the specific tax risks posed by umbrellas and how these risks might be mitigated. Evidence is sought from, among others, umbrellas and entities contracting with them, on their experiences, the steps they take to ensure tax compliance in their labour supply chains and the further steps HMRC and the government should take to prevent and tackle non-compliance.
Responses are requested, where possible by email (umbrellacompanyevidence@hmtreasury.gov.uk) by 11.45 pm on 22 February 2022.
Support for Women: Employment Minister calls on employers to provide stronger career support to stop menopause affecting careers
In a press release issued on 25 November 2021, the Minister for Employment called on employers to strengthen their support of the careers of women who suffer from serious menopause symptoms. The press release was issued alongside the publication of findings from the independent report commissioned by the government in July 2021, which found that almost one in four women are forced to leave work as a result of menopause symptoms and those who experience serious symptoms take an average of 32 weeks of leave. Without the support of employers, this could limit progression and lead to long-term unemployment. The Minister for Employment has urged employers to use a national network of advisors, “50 Plus Champions”, to support and retain their workers over the age of 50, including women experiencing the menopause.
The government will be responding to the recommendations of the report in the coming months. The recommendations of the Women and Equalities Committee’s inquiry into menopause in the workplace are also awaited.
As we have previously reported, ACAS now has guidance for employers on how to help women at work dealing with the menopause, which you can view here: Menopause at Work.
Parental Leave: Survey reveals prospect of better parental leave policies would lead six in ten employees to switch jobs
According to a survey conducted by Virgin Money, six in ten parents or expectant parents would change jobs if offered better parental leave benefits, reports Personnel Today. Virgin Money The survey revealed that employees were also worried that they would miss out on promotions or career opportunities while on maternity leave (58%) or lose their job (52%). Most of those who responded believed that parental leave policies are an important factor when considering roles at a new organisation (92%) and one in seven (14%) had already left roles due to poor parental leave entitlements, whilst almost a third (29%) of working parents feel maternity and paternity leave in the UK is generally outdated. Virgin Money goes on to report on other benefits workers and parents expect their company to offer include 30 days annual leave (55%), wellbeing days (39%), private medical insurance (31%) and the opportunity to work remotely abroad each year (28%).
The survey coincides with the launch of Virgin Money’s new parental leave policy, which offers equal family leave to all employees from the first day of employment. David Duffy, CEO of Virgin Money, said: “The pandemic has permanently changed our approach to working life. It’s clear to us that by taking a purpose-driven approach to how we work, we can help colleagues achieve a work-life balance that brings out their best.”
Statutory Pay Rates: April 2022 proposed increases to statutory maternity, paternity, adoption and sick pay announced
The Department for Work and Pensions (DWP) has published its proposed increases to a number of statutory benefit payments. The following rates are expected to apply from April 2022:
- The weekly rate of statutory sick pay (SSP) will be £99.35 (up from £96.35).
- The weekly rate of statutory maternity pay (SMP) and maternity allowance will be £156.66 (up from £151.97).
- The weekly rate of statutory paternity pay (SPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory shared parental pay (ShPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory adoption pay (SAP) will be £156.66 (up from £151.97).
The rates will be confirmed once an Order is made and are due to come into effect on 11 April 2022. The national minimum wage rates that will apply from April 2022 were announced in the Autumn Budget.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
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Employment Law Newsletter – September 2020
Cases:
- Breach of Contract: £1 damages for copyright infringement and breach of contract by former consultant
- Unfair Dismissal: Teacher suspected of possession of indecent images of children but not prosecuted was unfairly dismissed
- Unfair Dismissal: Lack of trust and confidence may be relevant to practicability of re-engagement
- Unfair Dismissal: No procedure, no problem – where the working relationship has broken down
- Disability Discrimination: Paranoid delusions not sufficient for definition of disability under Equality Act
- Equal Pay: Material factor needs to explain but not justify pay disparity
Other news:
- COVID-19: HMRC publishes updates to CJRS guidance and template for large employers
- COVID-19: DHSC publishes new guidance for employers on COVID-19 testing
- COVID-19: Amended guidance on working safely, including mandatory Test and Trace
- COVID-19: New HMRC guidance on calculating furlough pay for employees who come off furlough partway through a claim period
- COVID-19: Pandemic leads to backlog of 45,000 employment tribunal cases
- ACAS: Updated ‘Guidance on Managing Staff Redundancies’ published
- Data Protection: ICO launches accountability framework
Cases:
Breach of Contract: £1 damages for copyright infringement and breach of contract by former consultant
In DPA (London) Ltd v D’Aguanno and others [2020] EWHC 2374 (IPEC) the Intellectual Property Enterprise Court (IPEC) has ruled against the claimant in proceedings for copyright infringement and breach of contract in relation to all but one head of claim, which the defendant admitted. It awarded a nominal sum of £1 in damages.
The claim was brought by a firm of architects against three defendants: two individuals who had worked for it as self-employed contractors, and the company those individuals set up after they stopped working for the claimant. The judge found that the pair had worked for the claimant as consultants rather than employees under a verbal agreement containing certain implied terms.
The first defendant admitted that he had copied and stored three three-dimensional models from the claimant’s projects onto his laptop in order to use them in his portfolio to show the quality of work he had carried out for the claimant. His actions amounted to a breach of the claimant’s requirements to return all copies of the claimant’s works to it when he stopped working for the claimant, and not to remove documents from the claimant’s possession. However, as the models were specific to the sites and jobs done for the claimant, and at least two of the three were from completed projects, it was hard to see what other use the defendant could have made of them, and the judge accepted that he did not in fact put them to any use other than moving them from his laptop to a storage device (which he had since surrendered to the claimant). The evidence did not convince the judge that the defendants had infringed any other copyright works belonging to the claimant, nor was there any evidence that the other defendants had authorised the infringement relating to the models.
Due to the limited scope of the infringement, the judge considered that it would be disproportionate to have a full quantum trial, so he went on to assess damages. The defendant’s actions had not given rise to any need to re-create the models, and as he had not put the material to commercial use, his retention of the material had not caused the claimant any commercial loss either. Since no loss had been suffered, the judge awarded nominal damages of £1 for copyright infringement and breach of contract.
Unfair Dismissal: Teacher suspected of possession of indecent images of children but not prosecuted was unfairly dismissed
In K v L [2020] UKEAT 0014_18_2404 the EAT has held that a teacher was unfairly dismissed for misconduct after he was charged with possession of indecent images of children, but not prosecuted. The teacher admitted that a computer in his home was found to contain indecent images but denied that he was responsible for downloading them. The school found that there was insufficient evidence to conclude that the teacher was responsible for the images but decided that he should be dismissed in any event because allowing the teacher to return to his post would pose an unacceptable risk to children. In its dismissal letter, the school also referred to the “serious reputational damage” which would be caused if the teacher was subsequently found guilty of this kind of offence and the school had been aware of the allegations.
Allowing an appeal, the EAT held that the complaint as set out in the disciplinary invitation was based solely on misconduct and gave no notice that reputational damage was a potential ground of dismissal. In these circumstances, the employer was bound to make a decision on whether the misconduct had been established. Had it done so, it would have been bound to conclude that misconduct had not been established. The EAT could not accept that an employee could be dismissed on the basis of a matter that was only mentioned in an investigatory report, not in the actual complaint. Although reputational damage may be regarded as a separate ground of dismissal (that is, dismissal for ‘some other substantial reason’), it raises separate considerations to those in a misconduct dismissal, and this must be made clear from the outset. In this case, the teacher had not been given an opportunity to address the reputational issue in any detail at the disciplinary hearing.
Considering whether a fair dismissal would have been possible, had the school referred to reputational damage in the original complaint as set out in the disciplinary invitation, the EAT found that the scant evidence available meant that the teacher was dismissed in the absence of any information about the nature or seriousness of the images, or the reasons why no prosecution was brought. In the EAT’s view, the evidence was insufficient to support a dismissal based on reputational damage.
Unfair Dismissal: Lack of trust and confidence may be relevant to practicability of re-engagement
In Kelly v PGA European Tour [2020] UKEAT 0285_18_2608 the EAT has held that a tribunal erred in ordering re-engagement to a position for which an employee did not meet an essential requirement of the role and had impermissibly reached its own view on whether concerns about the employee’s capability and integrity had undermined trust and confidence.
Mr Kelly began employment with PGA in 1989 as Marketing Director, eventually becoming Group Marketing Director. A new Chief Executive was appointed in 2015. Within two months, he decided to dismiss Mr Kelly over concerns about his performance and willingness to “buy in” to his ideas. Exit terms could not be agreed. Mr Kelly was dismissed, subsequently bringing an unfair dismissal claim (among other claims). PGA conceded that the dismissal was unfair as a fair procedure had not been followed. When considering remedy, the tribunal decided that Mr Kelly should be re-engaged to the role of Commercial Director, China PGA European Tour. It considered that, while speaking Mandarin was an essential requirement of the role, Mr Kelly’s willingness to learn Mandarin and his proficiency in languages meant that re-engagement was practicable. Moreover, any trust and confidence issues arising from doubts about Mr Kelly’s capability and integrity (he had covertly recorded several meetings) were not so significant as to make re-engagement impracticable.
PGA appealed, arguing that the tribunal had impermissibly considered for itself whether trust and confidence had been damaged instead of asking whether PGA had a rational basis for believing that it had. The EAT allowed the appeal. The question for the tribunal was whether it was practicable to order PGA to re-engage Mr Kelly. It is the employer’s view of trust and confidence, tested by the tribunal as to its genuineness and rational foundation, that matters. The tribunal had therefore erred in reaching its own view. The EAT rejected the argument that trust and confidence is only relevant to practicability where dismissal is based on an employee’s conduct, not capability. The EAT also held that the tribunal had erred in substituting its own view on whether the ability to speak Mandarin was an essential requirement of the role. Requiring PGA to engage someone in a role for which they did not meet one of the essential requirements (genuinely and cogently determined by them and accepted by the tribunal) overstepped the mark and failed to give weight to the employer’s commercial judgment.
Unfair Dismissal: No procedure, no problem – where the working relationship has broken down
In Gallacher v Abellio Scotrail Limited [2020] UKEATS/0027/19/SS the ETA has upheld a decision of a tribunal that, in rather unusual circumstances, an employee can be fairly dismissed without any procedure (including an appeal), after a breakdown in working relations.
The Claimant was a senior manager in the Respondent’s business. Her relationship with her line manager deteriorated at a critical juncture for the business of the Respondent. The Claimant’s manager decided, after consulting with HR, to dismiss her at an appraisal meeting with no procedure, forewarning or right of appeal as the reason for her dismissal was “some other substantial reason” (namely a breakdown of working relations between the two of them). The tribunal found the dismissal was not unfair and also that the Respondent did not know (and could not reasonably have been expected to have known) of her disability (symptoms related to the menopause and depression). The Claimant appealed.
The EAT dismissed the appeal, holding that although any contention by an employer that following a procedure would be futile would be approached with caution, this was one of those rare cases where it was open to the tribunal to conclude that dismissal without any procedure was within the band of reasonable responses. The Claimant was a senior manager whose continued good working relationship with her manager was critical during a difficult period for the Respondent’s business. Moreover, the evidence was that the Claimant recognised the breakdown in relations herself and was not inclined to retrieve the situation. The tribunal found that any procedures at this time would not only have served no purpose but would in fact have worsened the situation.
Disability Discrimination: Paranoid delusions not sufficient for definition of disability under Equality Act
In Sullivan v Bury Street Capital Limited [2020] UKEAT 0317_19_0909 the EAT has upheld a tribunal decision that the Claimant’s disability of paranoid delusions was not sufficiently within the ‘long-term’ definition of disability under the Equality Act 2010 as it was not likely to recur, and therefore his claim for disability discrimination failed.
The Claimant was a sales executive with a small finance company. From about July 2013, following a split with a Ukrainian girlfriend, the Claimant suffered paranoid delusions that he was being followed and stalked by a Russian gang. These delusions affected his timekeeping, attendance and record-keeping (which were already a matter of concern even before 2013). However, things improved after September 2013. Whilst there were sporadic references to the Claimant’s poor attitude in that period, it was not until April 2017 that there was a worsening of the effect of the paranoid delusions on his day-to-day activities. The Claimant’s employment was terminated on 8 September 2017, ostensibly for reasons to do with capability and attitude. The Claimant lodged a claim complaining of unfair dismissal, disability discrimination and deduction of wages (amongst others). The tribunal held that he did not have a disability within the meaning of the Equality Act 2010. However, his claim of unfair dismissal was upheld.
In dismissing the appeal, the EAT held that the tribunal did not err in concluding that the long-term requirement in the definition of disability was not met. It found that the tribunal was entitled to conclude on the evidence that, although there was a substantial adverse effect in 2013 and again in 2017, in neither case was it likely that the adverse effect would last for 12 months or that it would recur. The tribunal had correctly applied “likely” as if it meant “could well happen”, and had approached the question of the likelihood of recurrence correctly. The tribunal also did not err in deciding that the Respondent did not know and could not reasonably be expected to know of the disability.
Equal Pay: Material factor needs to explain but not justify pay disparity
In Walker v Co-Operative Group and another [2020] EWCA Civ 1075 the Court of Appeal has held that an employment tribunal adopted the wrong test when deciding whether an employer could establish a material factor defence to a pay differential between a female HR executive and other male executives. In this case, the tribunal had found that explanations for the differential were no longer material when a job evaluation study was carried out 12 months after their pay had been set and which determined that, at some point during that period, the value of the HR executive’s work had become equal to that of her comparators. This lack of materiality, in the tribunal’s view, led it to conclude that the pay differential could no longer be justified and that the employer could not establish a material factor defence.
However, the test is not whether the employer can prove that the pay disparity is justified, but whether the reason for the difference is causative and whether it is material. The court said that the tribunal’s conclusion overlooked the fact that in respect of each of the comparators there was at least one material factor which remained causative of or which explained the difference in pay at the end of the period in question. Whether the factor justified the difference was not a question for the tribunal.
The court also criticised the tribunal’s decision to leave the exact point at which the claimant’s work became equal to that of her comparators to be determined at the remedy hearing. This was unsatisfactory since it left the starting point of the claim unresolved. The tribunal should either have made a finding as to the date as from which the claimant was doing equal work or found that she had failed to prove this at any stage before February 2015.
Other news:
Government guidance is being updated frequently and so we would strongly recommend that you check the current guidance at the point when you are making decisions on such guidance.
COVID-19: HMRC publishes updates to CJRS guidance and template for large employers
HM Revenue and Customs has further updated its guidance, Claim for wages through the Coronavirus Job Retention Scheme, and the accompanying claims form template for employers claiming through the Coronavirus Job Retention Scheme (CJRS) for 100 or more employees. The guidance and the “Details” section of the template now require employers to state whether an employee has returned from statutory leave before being put on furlough.
COVID-19: DHSC publishes new guidance for employers on COVID-19 testing
On 10 September 2020, the Department of Health and Social Care (DHSC) published Guidance for employers and third-party healthcare providers on COVID-19 testing and contact tracing. The guidance advises employers wanting to test non-symptomatic staff against using NHS Test and Trace, and to consider private alternatives. However, there is no obligation on employers to run testing programmes.
The guidance provides information about the types of testing available, as well as summarising relevant legal obligations (including when using apps) in Annex A. The following sections will be of particular interest to employers:
- Before deciding to test staff. Employers are advised, among other things, to consider the scope of any testing programme (for example, whether contractors will be tested), the frequency of testing, arrangements for individuals who refuse to be tested and how test results will be used.
- Communicating the intention to test staff. Employers are advised that any communications should be transparent and outline how any testing programme will operate in practice. Employers are “strongly advised” to consult with staff associations or unions before implementing any policy. They are also reminded of the need to comply with the GDPR and the Data Protection Act 2018, by ensuring that all data is processed lawfully, fairly and transparently and that staff are aware of how their personal data will be used, shared and kept.
- Contact tracing staff. The guidance anticipates that, although not compulsory, employers may want to introduce internal tracing systems alongside testing programmes. It states that any individual who has been identified as a contact by an internal tracing system, but not by NHS Test and Trace, will not qualify for Statutory Sick Pay (SSP). Provision should be made for them to work from home where possible. If this is not possible, the guidance advises that the individual may remain entitled to full pay unless their employment contract provides otherwise. Individuals do not have to self-isolate unless they are contacted by NHS Test and Trace but are advised to avoid contact with those at “high increased risk” of severe illness resulting from COVID-19.
The guidance also provides information on how to communicate test results and with whom, and what employers can and cannot do with the results. It encourages employers to keep staff informed about potential or confirmed COVID-19 cases but advises that individuals should not be named. The guidance applies to England only, but it states that “equivalent guidance” will be published for Scotland, Wales and Northern Ireland.
COVID-19: Amended Government guidance on working safely, including mandatory Test and Trace
The government has recently made several updates to its guidance on ‘Working safely during corona virus (COVID-19)’ for different types of workplace. The guidance applies to businesses in England.
The key changes address the following:
- The rule of six. New regulations restricting indoor or outdoor gatherings of more than six people (with some exceptions, including where the gathering is “reasonably necessary” for work or education) came into force on Monday 14 September.
- Test and Trace. The guidance on NHS Test and Trace has been strengthened. Whereas it previously advised that employers “should” keep records of staff working patterns for a period of 21 days, it now mandates that employers “must” do so. Some employers whose customers attend their premises, such as restaurants, hair salons, sports clubs and heritage locations (but not shops or banks), must now ask at least one member of each customer party visiting the site to provide contact details, “to ensure that businesses are able to remain open“.
- Priority actions. Each guidance document now starts with a list of “priority actions” and further key points to be aware of. Priority actions cover such things as risk assessments, cleaning, face coverings, social distancing, ventilation, Test and Trace records, and turning away anyone with symptoms of COVID-19.
Importantly, the guidance refers to “new regulations” on Test and Trace, with financial penalties for non-compliance, which came into force on 18 September 2020, as set out in a Press release on 10 September.
COVID-19: New HMRC guidance on calculating furlough pay for employees who come off furlough partway through a claim period
On 11 September 2020, HMRC amended its guidance on how employers should calculate the amount of a claim under the Coronavirus Job Retention Scheme (CJRS) to include a new method of calculation for employees whose furlough or flexible furlough ceases partway through a claim period.
To calculate how many furloughed hours they can claim for in respect of each employee, an employer must work out the employee’s usual working hours in the claim period as well as the number of these hours that the employee has worked and has not worked.
The guidance now states that, when claiming in respect of an employee who comes off furlough or flexible furlough partway through a claim period, an employer should:
- Only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period.
- Not include any working hours after the last day of furlough.
This applies even if the claim period includes days after the employee’s last day of furlough (for example, because the employer is claiming for multiple employees and some of them stay on furlough).
The amended calculation should be used from 14 September 2020 but employers do not need to amend claims submitted prior to this date.
HMRC’s worked example of how to calculate 80% of wages for a fixed-rate employee who returns to working their usual hours during the claim period (set out in a document containing multiple worked examples based on different scenarios) has been updated to reflect the new method of calculation.
COVID-19: Pandemic leads to backlog of 45,000 employment tribunal cases
According to the Law Society Gazette, Ministry of Justice data shows a backlog of cases waiting to be heard at employment tribunal level that reached 45,000 in August 2020. This represents a 26% increase from the start of March. The Office for National Statistics revealed that the UK’s unemployment rate also rose during this period from 3.9% to 4.1% from April to July 2020. The growing tribunal backlog may be due in part to the increase in redundancies, and in part due to listing difficulties during the COVID-19 pandemic.
ACAS: Updated ‘Guidance on Managing Staff Redundancies’ published
ACAS has updated its ‘Guidance on Managing Staff Redundancies’. It covers matter such as how to make a redundancy plan, avoiding compulsory redundancies, carrying out consultations, how to select employees for redundancy and given them notice, and working out redundancy pay. It also includes a section on supporting your staff and planning for the future.
Data Protection: ICO launches accountability framework
On 10 September 2020 the Information Commissioner’s Office (ICO) published its accountability framework, designed as a practical tool to help organisations of every size understand what good accountability looks like. It has been launched in beta with the ICO keen to hear feedback on the tool.
The framework includes expectations and examples of how to demonstrate accountability. It also includes an accountability self-assessment tool. It is divided into ten categories which cover topics such as leadership and oversight, policies and procedures, training and awareness, individuals’ rights, transparency, record keeping, contracts and data sharing, risk assessments, record management and security, and breach response and monitoring.
The ICO notes that embedding accountability in an organisation will help to enhance its reputation as a business that can be trusted with personal data.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
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Employment Law Newsletter – July 2020
A review of July’s employment law cases and other important news, including variousemployment-related Covid-19 updates.
